Applying the Kraljic model to the construction sector - the case of a prefab housing factory

The purchasing strategies in the construction industry have been considered by many writers in construction management as short-term and arms-length. However, a different picture is portrayed in the manufacturing industry, where the purchasing strategies are mostly long-term to secure supply for production. Industrialized building is at the crossroad between construction and manufacturing, which raises the question of what purchasing strategies are applied. The purpose of this study is to investigate how the Kraljic model (1983) can be applied in an industrialized housing factory. The purchasing strategies were studied through interviews with the CEO of a timber housing manufacturer in northern Sweden. Industrialized housing manufacturers can take advantage of standardized construction systems and secure production flows that eliminate waste and improve quality. Evidence proves that long-term relationships similar to those in the manufacturing industry also exist in the construction industry regarding factory production. The analysis of these strategies suggests that the total product offer, including logistic services, plays an important role in choosing supplier.